By Todd Bishop and Alan Boyle
Elon Musk has agreed to step down as Tesla’s chairman for three years but will remain CEO of the electric car maker, under the terms of documents filed today to settle a securities fraud case brought by the Securities and Exchange Commission.
Musk will also pay a $20 million penalty to settle charges sparked by his Aug. 7 tweets about a plan to take Tesla private. Tesla will pay an additional $20 million, the SEC said in a news release.
In addition, Tesla agreed to appoint two new independent directors to its board, establish a new committee of independent directors and implement procedures to oversee Musk’s communications via Twitter and other avenues.
Neither Musk nor Tesla admitted wrongdoing as part of the agreement, according to court papers. But Musk will be required to comply with Tesla’s new procedures for social-media posts, updates on the company’s website and blog, and statements made in news releases or during investor calls.
Tesla would have to give “pre-approval of any such written communications that contain, or reasonably could contain, information material to the company or its shareholders,” according to court documents.